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On March 20, 2014, Growth Energy and the Renewable Fuels Association (RFA), which represent the ethanol industry, and the American Fuel and Petrochemical Manufacturers (AFPM), along with the American Trucking Association and the Consumer Energy Alliance, filed petitions for writ of certiorari with the U.S. Supreme Court to make a final determination on the constitutionality of the California Low Carbon Fuel Standard (LCFS).


The groups are challenging the January 2014 decision of the U.S. Court of Appeals for the Ninth Circuit (the Ninth Circuit) to deny rehearing en banc in Rocky Mountain Farmer's Union v. Corey. On September 18, 2013, the Ninth Circuit issued its opinion in Rocky Mountain Farmer's Union v. Corey reversing a lower court opinion which found that the LCFS violated the dormant Commerce Clause of the U.S. Constitution by discriminating against ethanol produced outside of California. The LCFS assigns higher carbon intensity values to ethanol produced in the Midwest than in California. The press releases of Growth Energy and RFA (joint) and AFPM are available here and here.


One of the goals of the LCFS is to reduce the carbon content of transportation fuel by ten percent by 2020. It is significant to the biofuels industry, especially since several other states are considering similar programs and look to California's LCFS as an example.
 


 

On September 18, 2013, the 9th Circuit Court of Appeals reversed a December 2011 district court ruling and held that California's Low Carbon Fuel Standard (LCFS) does not violate the Dormant Commerce Clause of the U.S. Constitution on its face. The district court had sided with groups from the oil and gas, ethanol, and trucking industries and found that the LCFS violated the Dormant Commerce Clause because the statute gave higher carbon intensity values to out-of-state, Midwest, ethanol, putting that fuel at a disadvantage in California. At the time of the 2011 decision, the district court had also issued a preliminary injunction preventing the California Air Resources Board (CARB) from enforcing the LCFS.


In its decision this week, the appeals court held that the LCFS does not violate the Dormant Commerce Clause on its face, and it remanded to the district court whether the statute violates the clause "in purpose or in practical effect." The appeals court also vacated the preliminary injunction.


It has been reported that the ethanol industry is looking at their legal options in light of the appeals court decision.